2010
Invest in Students
Where is the money going for your school? This simple question is often lost in the larger discussion of budget deficits, teacher layoffs and tax increases. But the bottom line when talking about school finances is: How are school officials spending your money? Fortunately, a recent study sheds some light on that question -- with some surprising answers. A joint project by the Davenport Institute at Pepperdine University and the California Foundation for Commerce and Education found that, notwithstanding all the talk of "education budget cuts," while school spending increased from fiscal year 2003-04 through fiscal year 2007-08, overall, direct classroom spending declined. (Loren Kaye in The Press-Enterprise 08/16/2010)
2009
The Anti-Stimulus
The state budget abyss draws closer, and the first victims - surprisingly - are not public employees or school children or poor people, but instead are working men and women, many with union cards. State construction projects are grinding to a halt, triggered by a decision last month by a crucial state finance agency to halt working capital for state-financed projects. This has led to a cascading effect on state construction projects, placing at risk more than 5,700 projects valued at $22.5 billion. (Loren Kaye in Fox and Hounds Daily 01/15/09)
Does California Have a Revenue Problem or a Spending Problem?
The answer is probably “both,” but it is usually informed more by ideology than analysis. The following may be useful in guiding policy makers’ decisions on how much in new taxes versus program cuts to implement. (Loren Kaye in Fox and Hounds Daily 01/14/09)
Housing Continues Slide in California
The bottom to the California home price free-fall is still not in sight. Last week Standard and Poor’s released its monthly index of metro home prices, and California still registers a growing year-over-year drop. The composite average for San Francisco, Los Angeles and San Diego prices dropped in October by 28 percent from the previous year, the largest year-over-year drop recorded by the state, and exceeded only by the Sunbelt cities of Phoenix, Las Vegas and Miami. As you can see from the chart below, the trend is accelerating. (Loren Kaye in Fox and Hounds Daily 01/07/09)
Save the Columbus Day Holiday!!
While we should expect that public sector labor would defend every privilege they have gained for their members, it is still astonishing that state unions and their patrons would consider their positions immune from the ravages of the state’s budget debacle. With every other politician claiming we are in the worst economic downturn since the Great Depression, state unemployment rising to 8.3%, and consumer confidence falling to an all-time low, since when are reductions in state government personnel costs off limits? Indeed, Gov. Schwarzenegger has proposed what are probably the least harmful approaches to the current state workforce to minimize layoffs by a combination of furloughs, salary reductions, and reducing some state holidays, like Columbus Day. (Loren Kaye in Fox and Hounds Daily 01/06/09)
2008
Flim and Flam
Only hours after being sent a package of tax increase bills by the Legislature, Governor Arnold Schwarzenegger held a news conference yesterday to announce that he would reject the Democrats' flim-flam. The flim was the unlawful tax increases. The flam was the parody called "economic stimulus." (Loren Kaye in Fox and Hounds Daily 12/19/08)
Reducing Greenhouse Gases in California — They Still Won't Tell Us the Cost
Next Thursday the California Air Resources Board (CARB) will achieve a milestone in environmental regulation when it will likely adopt a Final Scoping Plan to implement the Global Warming Solutions Act of 2006. Perhaps the most far-reaching regulatory effort ever undertaken by a governmental agency, this plan will touch every aspect of Californians’ lives and the economy. But lost in the ceremony surrounding the plan – adopted even as California tumbles into the worst recession in a quarter century – is an honest assessment of its effect on Californians and our economy. (12/04/08 Loren Kaye in Fox and Hounds Daily)
Can the Feds Bailout California?
Speaker Bass has taken the position that the Legislature has already made $10 to $12 billion in cuts over the past several years, and enough is enough. Therefore, her preference in addressing the budget deficit is "I want to do 50 percent revenue and 50 percent from the federal government." (11/20/08 Loren Kaye in Fox and Hounds)
California Housing Blues
If you’re looking for a bottom in the California home price free-fall, keep looking. Standard and Poor’s released its monthly index of metro home prices, and the outlook is dismal for Sunbelt states, and for California in particular. The composite year-over-year average of San Francisco, Los Angeles and San Diego prices dropped in August by 27 percent, accelerating a trend that began in December of 2006. (Loren Kaye in Fox & Hounds Daily 10/31/08)
Lottery: The Schools Win Again!
Modernizing the State Lottery and allowing the state to “securitize” (get an advance on) future revenues are well-known elements of the budget deal hammered out in September. A constitutional amendment and related changes to the lottery initiative will be proposed to voters at the next statewide election. The Governor estimates that these changes will result in a $5 billion bump in revenues in 2009-10, which will be used “to pay down debt and fill the rainy-day fund in the out-years.” (Loren Kaye in Fox & Hounds Daily 10/28/08)
State Tax Hike Talk Must be Linked to Budget Reform
Is it better to ask permission or beg forgiveness? The California Legislature must believe it is better to beg forgiveness since they never sought permission to raise taxes to pay for a spending spree that has increased outlays by 80 percent since 1998. Now, faced with a deep budget deficit, many elected officials are advocating tax increases to pay for overspending. (Loren Kaye in the Sacramento Bee 04/22/08)